Lenny's Podcast: Product | Career | Growth
01:06:36 · Keith Rabois
[01:06:36] S0: I think the subtle signal, let's say very early, is speed. And it's one of those things that's easy to say, but let me try to be more concrete. There's a tempo, an operating tempo that a successful company develops that develops very early in a company's trajectory and is incredibly impressive. I remember when Roelof Botha was on my board at Square. He led the series B. So he joined our board. And six months in, so two board meetings in, he said to me, he's like, "I haven't seen this kind of tempo since our PayPal days." And he'd been a VC at that point for nine years. And I was curious, I said, "What are you noticing?" And he's like, "At board meeting X, you guys identify an opportunity or problem. And by the next board meeting, you've shipped solutions, addressed it, featured just constantly, consistently." And I think that's right. So the time between the seed and series A at Faire was pretty tight. And I remember at the time my chief of staff was Delian Asparouhov. And Delian said to me after the second fare board meeting that he shadowed me at, he said, "If there's one company in Silicon Valley that would cause me to leave being the VC, it'd be Faire." And I was like, "Interesting. Why?" And it's like, "The pace of execution." And his answer was exactly the same as Roelof's. He's like, "There is something slightly off. And by the next morning meeting, not only have they identified the root causes, but they've shipped and reacted and measured the impact of the solution. And that compounds, that speed really does come out." So that's just one trait, but you see it. It did lead me to, for example, preempt the series A of Ramp. So I led this seed in May-ish of 2019 and gave a term sheet to preempt the A in September. So pretty quick. One of the two signals was how fast Ramp was able to be on the precipice of shipping the cards. I'd been working in financial services for a long time at that point, 19 years or so. And there's just a lot of moving pieces to ship a card. You need these program managers, you need the sponsoring bank, and you need this and this and this. It usually takes nine to 12 months. Best case, nine. Ramp was on the precipice in three months. And I was like, "Oh my God, I've just never seen that velocity." That was one of two, maybe three inputs.
01:09:15 · Keith Rabois, Lenny Rachitsky
And I was like, yes, makes sense to double down already, even if we hadn't shipped anything yet. So I think that's one. Critical density of talent, you see companies just creating an unfair advantage. The team was X when you invested in them. So, "Wow, this team is getting better, deeper, better," et cetera. So that's another signal. The third thing that I've noticed though is I think they have a different hiring philosophy ultimately, and maybe there's exceptions to this, but most of the companies I work with that are thriving have basically skipped hiring senior people, senior experienced people, mostly internally group talent. And I think that model has worked really well. It's definitely true of Ramp, definitely true of Trade Republic. It seems to be a mostly common ingredient, but there's probably exceptions. [01:10:12] S1: Wow, that is an incredible answer instead of traits. Just to be clear, what you're saying on that third piece, so it's not hire fan CVPs from other successful companies and instead develop people internally as a trait of-
01:10:12 · Lenny Rachitsky, Keith Rabois
[01:10:12] S1: Wow, that is an incredible answer instead of traits. Just to be clear, what you're saying on that third piece, so it's not hire fan CVPs from other successful companies and instead develop people internally as a trait of- [01:10:25] S0: Internally and almost turned it into a competitive advantage, meaning your strategy. We're just not even going to interview people. We're not going to try. We're just going to promote from within. And I think in some roles, it's not like you're hiring a GC typically right out of law school. But although we have done that once and it worked out pretty well, believe it or not, but I wouldn't recommend that. I have this blog post. Well, Delian wrote this blog post of lessons he learned from Keith. And one talks about hiring senior people. And the rough prism is, are you hiring for value creation or value preservation? If you're hiring for value preservation, typically some experience is useful. On the value creation side, it's probably not. [01:11:07] S1: It's interesting how much of this comes back to just your initial point about hiring and the team being everything. So number two was talent density. And three is helping people develop and be into the role versus finding someone. And then obviously, speed all trickles down from just who you're hiring.
01:11:07 · Lenny Rachitsky, Keith Rabois
[01:11:07] S1: It's interesting how much of this comes back to just your initial point about hiring and the team being everything. So number two was talent density. And three is helping people develop and be into the role versus finding someone. And then obviously, speed all trickles down from just who you're hiring. [01:11:24] S0: Yeah. I mean, I've watched people use even chief of staff roles to groom talent. The one company board meeting I was at this week that is phenomenal on any metric. And the last two, his CMO, who's fantastic, is performing miraculously, was his last chief of staff and his new head of product probably is his current chief of staff. And just created this institution of factory where he can absorb ambitious, talented people and over one or two years in osmosis, train them to be senior successful leaders. [01:12:02] S1: When you talk about speed, I think about Ramp for sure. When Jeff was on the podcast, their CPO, he just, our title was velocity, velocity, velocity. And I know they have days. If you go to days.ramp.com, it's the number of days since they launched and they're just always looking at that number, how long is it? [01:12:20] S0: Oh, yeah. Every board meeting starts with that. The first slide, day 1,184. [01:12:26] S1: And they're like, what are they worth? 100 billion, not quite, but they're insane. [01:12:30] S0: Probably not quite that much- [01:12:30] S1: Not quite but it's insane. [01:12:33] S0: ... but a reasonable fraction of that.
01:12:33 · Keith Rabois, Lenny Rachitsky
[01:12:33] S0: ... but a reasonable fraction of that. [01:12:35] S1: Okay. That was incredibly valuable. Okay. One last hot take that I know you have that I want to make sure we share is this idea of criticizing in public versus in private. Talk about that. [01:12:44] S0: Yeah. So this is a lesson I actually absorbed from one of the great founders I work with and like many great founders, they have their own management philosophy. And one of the most important tenents is criticize people in public. And when you decompose the logic of it's so obviously true, but almost no one does this and very few people talk about it even if they do it. So if you think about it, when you give people feedback negative individually, you're optimizing for the atomic unit, not the system. The reason why to do it in public is it's more important for all the colleagues to understand that there's an issue, it's being addressed versus they usually have suspicions, let's say, or concerns. And if you've channeled the negative feedback to the individual, they don't know that you're addressing this, that you're on top of it, you're aware you're addressing it. Now it's a collaborative. And then also it lets other people kind of raise their hand and say, "You know what? I can help with that," or et cetera. And so, it becomes like a team building exercise in some way versus like, "Oh, you have this deficiency, go fix it yourself." And then the rest of the company is nervous about why this problem is persisting.
01:12:44 · Keith Rabois, Lenny Rachitsky
[01:12:44] S0: Yeah. So this is a lesson I actually absorbed from one of the great founders I work with and like many great founders, they have their own management philosophy. And one of the most important tenents is criticize people in public. And when you decompose the logic of it's so obviously true, but almost no one does this and very few people talk about it even if they do it. So if you think about it, when you give people feedback negative individually, you're optimizing for the atomic unit, not the system. The reason why to do it in public is it's more important for all the colleagues to understand that there's an issue, it's being addressed versus they usually have suspicions, let's say, or concerns. And if you've channeled the negative feedback to the individual, they don't know that you're addressing this, that you're on top of it, you're aware you're addressing it. Now it's a collaborative. And then also it lets other people kind of raise their hand and say, "You know what? I can help with that," or et cetera. And so, it becomes like a team building exercise in some way versus like, "Oh, you have this deficiency, go fix it yourself." And then the rest of the company is nervous about why this problem is persisting. [01:14:02] S1: When people hear this, it may feel like, "Oh, wait," it feels aggressive to be criticized everyone public comment. Any advice for just how do you not make it this, I don't know, scary environment or is that part of it?